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January 10, 2015

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Stan

lol Steve "So could you confirm that the LST are based on the wrong interest rates?" Pretty rich, coming from an admissions officer.

Here's a question for you Steve, can you confirm that KU will be releasing detailed employment outcomes for all its graduates in the same way that Michigan has, instead of your paltry 25 / 75 / median percentile numbers?

Jojo

Steve,

You're absolutely right. Kyle is using the wrong interest rate (ie "very incorrect interest") so all 200 law schools are wrong!!!!!

The fine print -
Kyle discloses projected interest rates and discloses the methodology he uses (which, by the way, is the correct methodology after 2013) of adding a percentage (eg 4.6 percentage points) to the 10 year Treasury rate. Kyle's numbers are off, because he shot high on what the 10 year T-Bill would be. No JD Advantaged job trading bonds at Goldman for you Kyle.

As Steve observes, when dealing with the astronomical sums that represent the principal borrowed for law schools, 500 basis points can add up to real money.
____________________________
The really fine print . . .

RATES FOR GRADUATE AND PROFESSIONAL FDUSL.— Notwithstanding the preceding paragraphs of this subsection,
for Federal Direct Unsubsidized Stafford Loans
issued to graduate or professional students, for which the
first disbursement is made on or after July 1, 2013, the
applicable rate of interest shall, for loans disbursed during
any 12-month period beginning on July 1 and ending on
June 30, be determined on the preceding June 1 and be
equal to the lesser of—
‘‘(i) a rate equal to the high yield of the 10-year
Treasury note auctioned at the final auction held prior
to such June 1 plus 3.6 percent; or
‘‘(ii) 9.5 percent.
‘‘(C) PLUS LOANS.—Notwithstanding the preceding
paragraphs of this subsection, for Federal Direct PLUS
Loans, for which the first disbursement is made on or
after July 1, 2013, the applicable rate of interest shall,
for loans disbursed during any 12-month period beginning
on July 1 and ending on June 30, be determined on the
preceding June 1 and be equal to the lesser of—
‘‘(i) a rate equal to the high yield of the 10-year
Treasury note auctioned at the final auction held prior
to such June 1 plus 4.6 percent

Kyle,

MacK

Steve, "loan origination fees of 1.07% for Stafford and 4.29% for PLUS" seem remarkably high - mortgage loan origination fees - for what are much more complex loans to make are typically between 0.5% and 2%. Who receives the loan origination fee? The law school?

JM

I can't help but laugh at Steven Freedman and his uproar over the fact that LST's interest rate predictions turned out to be off slightly.

Now that you're in the spirit of being forthright, what about those employment and income stats that law schools have been outright cooking for at least a decade or two? You know, like Santa Clara parking ~60 in the "unemployed, not seeking" category, or all those school funded jobs that last just long enough for reporting purposes.

The kicker is that these accusations come in a thread in which a law professor advocates for including average debt figures in Wikipedia pages. I would love to take a deep dive into average debt figures which frequently only amount to $120k. How are numbers that low possible? I'd bet anything these numbers need to be inflated by 20% before they come close to the real average debt figures.

Jojo

JM -

I agree entirely. I can understand (but not approve) law faculty who do not want to rock the boat and want to try to weather the storm until they retire. I don't get the vocal opponents to the law school transparency movement who advocate for the disclosure of more information on outcomes and costs.

Just saying...

The average indebtedness has to be dropping given the tuition discounting going on. I know of one school (not top 100) that is discounting on average over 50%. This is probably not unusual for any school out of the top 50 or so.

Jojo

Ben,

Thanks for removing the LST reference in the post.

dupednontraditional

Steven Freedman, everybody...! Thank you, thank you, he's here all week, folks! Be sure to tip your waitresses, now. Who knows, you may be helping a JD-Advantage graduate!

*Rim shot*
*snare drum*
*cymbal*

On to our next act...!

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